Guest Post by Ben Hunt
In a poker game, the rake is the cut that the casino dealer takes out of every pot. It’s usually a couple of dollars per hand … barely noticeable, certainly not noticeable to a casual poker player like me.
But what if the dealer started taking 18-25% out of every pot as his rake? Would you notice then?
That’s what JP Morgan management does with its “return of shareholder capital” through stock buybacks.
Cramer: Jamie Dimon, when questioned about $31 million pay, should have said he’s worth it [CNBC]
“I would’ve said, ’Look I know you think that I may be overpaid but I do point out that others have shared in the wealth,” the “Mad Money” host says.
In 2018, JP Morgan bought back 181.5 million shares of stock for $20 billion. Also in 2018, JP Morgan issued 32 million new shares to management (18% of buyback). Those newly issued shares were worth $3.5 billion then, and are worth $4.2 billion today.
